Gwyneth Paltrow tops 'People' mag's Most Beautiful list. / People

by Ann Oldenburg, USA TODAY

by Ann Oldenburg, USA TODAY

People mag unveiled its annual "World's Most Beautiful Woman" issue this morning and a smiling Paltrow, 40, is the the cover girl.

"Around the house, I'm in jeans and a T-shirt. I don't really wear makeup," she says, explaining that casual Gwyneth is how her kids, Moses, 7, and Apple, 8, are used to seeing her.

As for her husband, Coldplay frontman Chris Martin, she says, "He'll make a joke about it. If I've gotten fully dressed up, he'll be like, 'Oh, wow! You're Gwyneth Paltrow!' Because he's used to seeing me in like baggy shorts and frizzy hair."

It sounds like little Apple might be following in mom's glam footsteps. She's already interested in makeup.

"When we're home sometimes, she'll put on mascara. And sometimes I'll let her wear something out to dinner - but just a little dab," says Gwyneth.

The star caused a bit of a controversy with her latest GOOP newsletter. She features an exclusive line of bikinis for girls ages 4 to 8. The $45 suits are styled after adult models and has prompted some to say Paltrow is "sexualizing" kids.